<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SANMINA CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
SANMINA CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 30, 1998
The Annual Meeting of Stockholders of Sanmina Corporation (the "Company")
will be held on Friday, January 30, 1998, at 11:00 a.m., local time, at the
Sheraton San Jose Hotel located at 1801 Barber Lane, Milpitas, California 95035
(telephone 408-943-0600) for the following purposes (as more fully described in
the Proxy Statement accompanying this Notice):
1. To elect directors of the Company.
2. To approve an amendment to the Company's Amended 1990 Incentive
Stock Plan to increase the number of shares of Common Stock reserved for
issuance thereunder to 4,550,000.
3. To approve an amendment to the Company's 1993 Employee Stock
Purchase Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 200,000 shares to a new total of 850,000 shares.
4. To confirm the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for the fiscal year ending
September 30, 1998.
5. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on December 23, 1997 are
entitled to vote at the Annual Meeting and are cordially invited to attend the
meeting. However, to ensure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. If you attend the meeting,
you may vote in person even if you return a proxy.
FOR THE BOARD OF DIRECTORS
Jure Sola
Chief Executive Officer and
Chairman of the Board of Directors
San Jose, California
December 30, 1997
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING,
YOU MAY VOTE IN PERSON, EVEN IF YOU RETURN A PROXY.
<PAGE> 3
SANMINA CORPORATION
------------------------
PROXY STATEMENT FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
------------------------
INFORMATION CONCERNING VOTING AND PROXY SOLICITATION
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Sanmina Corporation ("Sanmina" or the "Company") for use at the Annual Meeting
of Stockholders to be held on Friday, January 30, 1998 at 11:00 a.m., local
time, or at any adjournment thereof. The Annual Meeting will be held at the
Sheraton San Jose Hotel located at 1801 Barber Lane, Milpitas, California 95035.
The telephone number at the meeting location is (408) 943-0600.
This Proxy Statement was mailed on or about December 30, 1997, to all
stockholders entitled to vote at the meeting.
RECORD DATE AND STOCK OWNERSHIP
Stockholders of record at the close of business on December 23, 1997 (the
"Record Date") are entitled to vote at the meeting. As of December 4, 1997,
20,674,999 shares of the Company's Common Stock were issued and outstanding and
held of record by approximately 530 stockholders.
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of September 30, 1997, as to (i)
each person who is known to the Company to beneficially own more than five
percent of the outstanding shares of its Common Stock, (ii) each director and
nominee for election, (iii) each officer named in the Summary Compensation Table
below and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT
NAME OWNED OWNED
---- ------------ -----------
<S> <C> <C>
Putnam Investments, Inc............................................. 1,906,000 9.28%
One Post Office Square
Boston, Massachusetts 02109
Pilgrim Baxter & Associates......................................... 1,879,000 9.15%
1255 Drummers Lane, Suite 300
Wayne, Pennsylvania 02109
Fidelity Management & Research...................................... 1,527,000 7.44%
(subsidiary of Fidelity Investments)
82 Devonshire Street
Boston, MA 02109
Nicholas-Applegate Capital Management............................... 1,403,000 6.83%
1990 Post Oak Boulevard, Suite 1100
Houston, Texas 77056-3890
AIM Advisors Inc.................................................... 1,028,000 5.01%
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT
NAME OWNED OWNED
---- --------- ----
<S> <C> <C>
Jure Sola (1)....................................................... 489,077 2.8%
Bernard Vonderschmitt(1)............................................ 15,579 *
John C. Bolger (1).................................................. 6,020 *
Neil Bonke (1)...................................................... 3,593 *
Mario Rosati (1).................................................... 3,750 *
Randy Furr (1)...................................................... 105,306 *
Michael Landy(1).................................................... 36,845 *
Eric Naroian (1).................................................... 14,331 *
Bernard Whitney..................................................... -- --
All directors and executive officers as a group(1).................. 674,501 3.8%
</TABLE>
- ---------------
* Less than 1%.
(1) Includes stock issuable upon exercise of options within 60 days after
September 30, 1997.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the meeting and voting in person. Attending the Annual
Meeting in and of itself may not constitute a revocation of a proxy.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share held as of the
record date. Stockholders will not be entitled to cumulate their votes in the
election of directors.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's Transfer Agent. The Inspector will also determine whether or not a
quorum is present. Except in certain specific circumstances, the affirmative
vote of a majority of shares present in person or represented by proxy at a duly
held meeting at which a quorum is present is required under Delaware law for
approval of proposals presented to stockholders. In general, Delaware law also
provides that a quorum consists of a majority of shares entitled to vote and
present or represented by proxy at the meeting. The Inspector will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but will not be treated as votes in favor
of approving any matter submitted to the stockholders for a vote. Any proxy
which is returned using the form of proxy enclosed and which is not marked as to
a particular item will be voted for the election of directors, for approval of
the amendment to the 1990 Incentive Stock Plan, for approval of the amendment to
the 1993 Employee Stock Purchase Plan, for the confirmation of the appointment
of the designated independent public accountants and, as the proxy holders deem
advisable, on other matters that may come before the meeting, as the case may be
with respect to the items not marked. If a broker indicates on the enclosed
proxy or its substitute that it does not have discretionary authority as to
certain shares to vote on a particular matter ("Broker Non-Votes"), those shares
will not be considered as present with respect to that matter. The Company
believes that the tabulation procedures to be followed by the Inspector are
consistent with the general statutory requirements in Delaware concerning voting
of shares and determination of a quorum.
The cost of soliciting proxies will be borne by the Company. The Company
may retain the services of its transfer agent, Norwest Bank Minnesota, N.A., or
other proxy solicitors to solicit proxies, for which the Company estimates that
it would pay fees not to exceed an aggregate of $20,000. In addition, the
Company expects to reimburse brokerage firms and other persons representing
beneficial owners of shares for their expense in forwarding solicitation
material to such beneficial owners. Proxies may be solicited by certain of the
2
<PAGE> 5
Company's directors, officers and regular employees, without additional
compensation, in person or by telephone or facsimile.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Proposals that are intended to be presented by stockholders of the Company
at the 1999 Annual Meeting must be received by the Company no later than
September 1, 1998 in order that they may be included in the proxy statement and
form of proxy relating to that meeting.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
A board of five directors will be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the five nominees named below. Messrs. Bolger, Bonke, Sola and Vonderschmitt
are presently directors of the Company. If any nominee is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be voted
for any nominee who shall be designated by the present Board of Directors to
fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director. If stockholders nominate additional persons for
election as directors, the proxy holders will vote all proxies received by them
in accordance to assure the election of as many of the Board's nominees as
possible, with the proxy holder making any required selection of specific
nominees to be voted for. The term of office of each person elected as a
director will continue until the next annual meeting of stockholders or until
that person's successor has been elected.
The Board of Directors recommends a vote FOR the nominees listed below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
--------------- --- -------------------- --------
<S> <C> <C> <C>
John Bolger....................... 51 Independent consultant 1994
Neil Bonke........................ 56 Retired 1995
Jure Sola......................... 46 Chairman and Chief Executive Officer of 1989
Sanmina Corporation
Bernard Vonderschmitt............. 74 Chairman of the Board of Xilinx, Inc. 1990
Mario Rosati...................... 51 Member, Wilson Sonsini Goodrich & Rosati 1997
</TABLE>
Mr. Bolger has been a director of the Company since 1994. From June 1989
through April 1992, he served as Vice President of Finance and Administration of
Cisco Systems, Inc., a manufacturer of computer networking systems. Mr. Bolger
is currently an independent business consultant and serves as a director of
Integrated Device Technology, Inc., Integrated Systems, Inc., TCSI, Inc. and
Network Associates, Inc.
Mr. Bonke has been a director of the Company since 1995. He also serves on
the Board of Directors of Electroglas, Inc., a manufacturer of automatic
semiconductor wafer probing equipment, FSI International and SpeedFam
International, a semiconductor equipment company. Mr. Bonke previously served as
the Chairman of the Board of Electroglas, Inc. From April 1993 to April 1996, he
served as Chief Executive Officer of Electroglas. From September 1990 to April
1993, Mr. Bonke was a Group V.P. and President of Semiconductor Operations of
General Signal Corp.
Mr. Sola co-founded Sanmina in 1980 and initially held the position of Vice
President of Sales and was responsible for the development and growth of the
Company's sales organization. He became Vice President and General Manager in
October 1987 with responsibility for all manufacturing operations as well as
sales and marketing. Mr. Sola has been a director of the Company since July 1989
and was elected President in October 1989 and has served as Chairman of the
Board and Chief Executive Officer since April 1991.
Mr. Vonderschmitt has been a director of the Company since October 1990. He
co-founded Xilinx, Inc., a manufacturer of field programmable gate array
semiconductor products and related system software, served as its Chief
Executive Officer and as a director from its inception in February 1984 through
February 1996,
3
<PAGE> 6
and has served as the Chairman of its Board of Directors since February, 1996.
He is also a director of Chips and Technologies, Inc., and International
Microelectronic Products, Inc.
Mr. Rosati has been a member of the law firm Wilson Sonsini Goodrich &
Rosati, Professional Corporation since 1971. Mr. Rosati is a director of Genus,
Inc., a semiconductor equipment manufacturer, Ross Systems, Inc., a software
company, and C-ATS Software, Inc., a financial database software company.
There are no family relationships among directors or executive officers of
the Company.
BOARD MEETINGS, COMMITTEES AND DIRECTOR COMPENSATION
The Board of Directors of the Company held six meetings during the fiscal
year ended September 30, 1997. No nominee who was a director during the entire
fiscal year attended fewer than 75 percent of the meetings of the Board of
Directors or of committees on which such person served.
The Board of Directors has an Officer Stock Committee, an Audit Committee
and a Compensation Committee. It does not have a nominating committee or a
committee performing the functions of a nominating committee. From time to time,
the Board has created various ad hoc committees for special purposes. No such
committee is currently functioning.
The Officer Stock Committee consists of directors Bonke and Vonderschmitt.
The Officer Stock Committee reviews and makes recommendations to the Board
concerning option grants to executive officers of the Company. The Officer Stock
Committee held two meetings and acted by unanimous written consent once during
the last fiscal year.
The Audit Committee consists of directors Bonke and Bolger. The Audit
Committee is responsible for reviewing the results and scope of the audit and
other services provided by the Company's independent public accountants. The
Audit Committee held two meetings in the last fiscal year.
The Compensation Committee consists of directors Bonke, Sola and
Vonderschmitt. The Compensation Committee reviews and makes recommendations to
the Board concerning salaries and incentive compensation for executive officers
and certain employees of the Company. The Compensation Committee held two
meetings during the last fiscal year. Mr. Sola, Chairman and Chief Executive
Officer of the Company, participates fully with all other committee members in
recommending salaries and incentive compensation to the board of directors,
except that he does not participate in committee proceedings relating to his
salary and compensation.
Directors who are not employees of the Company ("Outside Directors") are
paid an annual retainer of $10,000, a fee of $2,000 for attending each board
meeting and a fee of $1,000 for attending each committee meeting. The directors
are reimbursed for travel and related expenses incurred by them in attending
board and committee meetings. Prior to the adoption of the Company's 1995
Director Option Plan (the "Director Option Plan"), Outside Directors received
initial and annual grants of options to purchase shares of the Company's Common
Stock under the Company's Amended 1990 Incentive Stock Plan (the "Stock Plan").
Since the adoption of the Director Option Plan in January 1996, Outside
Directors have received the same initial and annual grants only under the
Director Option Plan under substantially similar terms as under the Stock Plan.
Under the Director Option Plan, upon first becoming a director, each new
Outside Director will receive an automatic grant of an option to purchase up to
15,000 shares of Common Stock and each continuing Outside Director will receive
(provided that such Outside Director has been a director for at least four
months prior to such grant), on October 1 of each year, an automatic grant of an
option to purchase up to 7,500 shares of Common Stock.
4
<PAGE> 7
EXECUTIVE COMPENSATION
COMPENSATION TABLES
Summary Compensation Table. The following table sets forth the compensation
paid by the Company for each of the three years in the period ended September
30, 1997 to the Chief Executive Officer and all other executive officers of the
Company:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------
ANNUAL COMPENSATION AWARDS OF ALL OTHER
FISCAL ---------------------- OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (# OF SHARES)(2) ($)(1)
------- ---------- --------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Jure Sola............................... 1997 $ 310,000 $ 385,000 101,500 $ 48,237
Chief Executive Officer 1996 250,000 300,000 150,000 48,163
and Chairman of the Board 1995 201,937 210,000 120,000 40,122
Randy Furr.............................. 1997 $ 240,000 $ 295,000 55,000 $ 25,266
President, Chief Operating Officer 1996 175,000 225,000 60,000 25,190
1995 144,620 139,500 34,000 19,510
Bernard J. Whitney...................... 1997 $ 27,750 $ 10,000 50,000 $ 1,110
Vice President and Chief Financial
Officer(3)
Eric Naroian............................ 1997 $ 180,000 $ 72,000 20,000 $ 7,778
Vice President, Sales(4) 1996 140,000 90,000 20,000 6,836
1995 103,041 60,000 15,020 916
Michael Landy........................... 1997 $ 140,000 $ 75,000 16,500 $ 7,200
Vice President, Sales and Marketing(5)
</TABLE>
- ---------------
(1) Includes car allowance and premium payments for keyman life, medical and
dental insurance.
(2) All share amounts reported reflect the 2 for 1 split of the Company's Common
Stock effected in March 1996.
(3) Mr. Whitney joined the Company as Vice President and Chief Financial Officer
in August, 1997.
(4) Mr. Naroian left the Company in October, 1997.
(5) Mr. Landy was promoted to Vice President, Sales and Marketing in October,
1997.
Option Grants in Last Fiscal Year. The following table sets forth each
grant of stock options made during the fiscal year ended September 30, 1997 to
each executive officer named in the Summary Compensation Table above:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
OPTIONS EXERCISE APPRECIATION FOR OPTION
GRANTED TO OR BASE TERM(2)
OPTIONS EMPLOYEES PRICE(1) EXPIRATION -----------------------
NAME GRANTED(1)(#) IN FY97 ($/SH) DATE 5%($) 10%($)
---- ------------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jure Sola.................... 79,000 10.4% $ 40.13 10/23/06 $1,993,768 $5,052,594
22,500 3.0% $ 43.75 04/02/07 $ 619,068 $1,568,840
Randy Furr................... 55,000 7.3% $ 40.13 10/23/06 $1,388,065 $3,517,629
Bernard Whitney.............. 50,000 6.6% $ 72.75 08/15/07 $2,287,604 $5,797,238
Eric Naroian................. 20,000 2.6% $ 40.13 10/23/06 $ 504,751 $1,279,138
Michael Landy................ 16,500 2.2% $ 40.13 10/23/06 $ 416,419 $1,055,289
</TABLE>
- ---------------
(1) The exercise price and tax withholding obligations related to exercise may
in some cases, be paid by delivery of other shares or by offset of the
shares subject to the options.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the SEC and therefore are not intended to forecast
possible future appreciation, if any, of the Company's stock price. The
Company did not use an alternative formula for a grant date valuation, as
the Company
5
<PAGE> 8
does not believe that any formula will determine with reasonable accuracy a
present value based on future unknown or volatile factors.
(3) All share amounts reported reflect the 2 for 1 spilt of the Company's Common
Stock effected in March 1996.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values. The following table sets forth, for each of the executive officers named
in the Summary Compensation Table above, each exercise of stock options during
the fiscal year ended September 30, 1997 and the year-end value of unexercised
options:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT YEAR-END OPTIONS AT YEAR-END(2)
EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($) (#) ($)
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Jure Sola................. -- -- 226,249/245,251 $ 15,747,100/$14,596,005
Randy Furr................ 20,000 $ 1,061,550 75,982/106,151 $ 5,260,890/$ 6,202,258
Bernard J. Whitney........ -- -- 0/50,000 $ 0/$ 687,500
Eric Naroian.............. 29,766 $ 1,407,683 2,967/42,517 $ 195,095/$ 2,555,959
Michael Landy............. -- -- 30,276/37,224 $ 2,111,702/$ 2,252,163
</TABLE>
- ---------------
(1) Based on the last reported sale price of the Company's Common Stock on the
date of exercise.
(2) Based on a fair market value of $86.50, which was the last reported sale
price of the Company's Stock on September 30, 1997.
COMPENSATION COMMITTEE AND OFFICER STOCK COMMITTEE REPORTS
The following reports are provided to stockholders by the members of the
Compensation Committee and the Officer Stock Committee of the Board of
Directors.
Compensation Committee Report
Compensation Philosophy. The goals of the Company's executive compensation
program are to attract and retain executive officers who will strive for
excellence, and to motivate those individuals to achieve superior performance by
providing them with rewards for assisting the Company in meeting revenue and
profitability targets.
Compensation for the Company's executive officers consists of base salary
and potential cash bonus, as well as potential long-term incentive compensation
through stock options. The Compensation Committee considers the total current
and potential long-term compensation of each executive officer in establishing
each element of compensation.
Cash-Based Compensation. Each fiscal year, the Compensation Committee
reviews with the Chief Executive Officer and approves, with appropriate
modifications, an annual base salary plan for the Company's executive officers.
This base salary plan is based on industry and peer group surveys and
performance judgements as to the past and expected future contributions of the
individual executive officers. The Compensation Committee reviews and fixes the
base salary of the Chief Executive Officer based on similar competitive
compensation data and the Committee's assessment of his past performance and its
expectation as to his future contributions in leading the Company.
6
<PAGE> 9
Each officer who served in an executive capacity throughout the last fiscal
year, including the Chief Executive Officer, received a cash bonus for such
service. These bonuses ranged in amount from approximately 60% annualized to
approximately 125% of base salary. In determining the bonus paid to each officer
(other than the Chief Executive Officer), the Compensation Committee reviewed
with the Chief Executive Officer the performance of each of the officers in
their respective areas of accountability as compared to the Company's operating
plan, and each officer's respective contribution to the Company's operating
performance in its electronics manufacturing services, backplane assembly and
subassembly and printed circuit board fabrication businesses. The members of the
Compensation Committee (other than the Chief Executive Officer) reviewed these
same factors in determining the bonus paid to the Chief Executive Officer.
Respectfully submitted,
Neil Bonke, Jure Sola and Bernard
Vonderschmitt
Officer Stock Committee Report
Stock Options. During each fiscal year, the Officer Stock Committee
considers the desirability of granting to executive officers awards under the
Company's Amended 1990 Incentive Stock Plan, which allows for the grant of
longer-term incentives in the form of stock options. In fixing the grants of
stock options to executive officers (other than the Chief Executive Officer) in
the last fiscal year, the Committee reviewed with the Chief Executive Officer
the recommended individual award, taking into account the officer's scope of
responsibility and specific assignments, strategic and operational goals
applicable to the officer, anticipated performance requirements and
contributions of the officer, and the number of options previously granted to
the officer. All stock options granted to executive officers in the last fiscal
year provide for vesting over a five-year period. During the fiscal year ended
September 30, 1997, an option award exercisable for up to 101,500 shares of the
Company's Common Stock was made to the Chief Executive Officer and options
exercisable for up to 243,000 shares were granted to all executive officers as a
group. In addition, in October 1997, in part in recognition of their performance
during fiscal 1997, the Officer Stock Committee approved grants of options in
the amount of 100,000 and 70,000 to the Chief Executive Officer and Chief
Operating Officer, respectively.
Respectfully submitted,
Neil Bonke and Bernard Vonderschmitt
7
<PAGE> 10
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
returns for the Company's Common Stock, the Nasdaq Stock Market Index, and an
index based on companies in a peer group (Standard Industrial Classification
3670 -- Electronic Components). The graph assumes the investment of $100 on
April 14, 1993, the date of the Company's initial public offering. The
performance shown is not necessarily indicative of future performance.
COMPARISON OF 53 MONTH CUMULATIVE TOTAL RETURN*
AMONG SANMINA CORPORATION, THE NASDAQ STOCK MARKET
(U.S.) INDEX AND A PEER GROUP
GRAPH
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SANMINA NASDAQ STOCK
(FISCAL YEAR COVERED) CORPORATION MARKET (U.S.) PEER GROUP
<S> <C> <C> <C>
4/14/93 0 0 0
9/93 237 119 113
9/94 225 150 114
9/95 444 289 158
9/96 748 222 187
9/97 1609 334 257
</TABLE>
* $100 INVESTED ON 4/14/93 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER 30.
8
<PAGE> 11
PROPOSAL NO. 2:
APPROVAL OF AMENDMENT TO 1990 INCENTIVE STOCK PLAN
The Company's Amended 1990 Incentive Stock Plan was adopted by the
Company's board of directors and approved by its stockholders in January 1990.
The Stock Plan provides for the granting to employees (including officers and
employee directors) of "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended, and for the granting to
employees (including officers and employee directors) and consultants of
nonstatutory stock options. The Stock Plan also provides for the grant of "stock
purchase rights" to employees and consultants pursuant to which the Company
issues stock as a bonus or as a purchase. In December 1997, the Board of
Directors approved the amendment of the Stock Plan to increase the shares
available for issuance thereunder by 900,000 shares from the current level of
3,650,000 shares to a new total of 4,550,000 shares. The Board of Directors
approved the amendment to the Stock Plan to establish a sufficient number of
shares of Common Stock as a reserve for issuance under the Stock Plan. The
affirmative vote of holders of a majority of the shares of Common Stock
represented at the meeting is necessary to approve the amendment to the Stock
Plan. The Board of Directors recommends that stockholders vote FOR approval of
the amendment to the Stock Plan. The essential features of the Stock Plan and
certain information regarding the Stock Plan are set forth below.
Status of Shares. As of September 30, 1997, options to purchase 3,588,950
shares of Common Stock had been granted under the Stock Plan and 480,564 shares
remained available for future grant. Assuming the approval of the amendment of
the Stock Plan, 1,380,564 shares (less options granted from October 1, 1997 to
the date of the annual meeting) will be available for future grant thereunder.
In March 1996, the Company's board of directors approved a 1996 Supplemental
Stock Plan (the "Supplemental Plan") and reserved 250,000 shares for issuance
thereunder. The Supplemental Plan permits the grant of only nonstatutory options
at an exercise price at least equal to 100% of the fair market value of the
Company's Common Stock on the date of grant. The Supplemental Plan does not
permit the grant of stock options to executive officers or directors of the
Company.
Eligibility; Administration. The Stock Plan is administered by the board of
directors or a committee thereof, which determines the terms of each option
granted under the Stock Plan, including the exercise price, number of shares of
stock subject to the option and exercisability. The Company cannot grant an
incentive stock option if as a result of the grant the optionee would have the
right in any calendar year to exercise for the first time one or more incentive
stock options for stock having an aggregate fair market value (under all plans
of the Company and determined for each share of stock as of the date such option
was granted) in excess of $100,000.
Exercise Price; Market Value. The exercise price of all incentive stock
options granted under the Stock Plan must be at least equal to the fair market
value of the Common Stock of the Company on the date of grant. The exercise
price of all nonstatutory stock options and stock purchase rights must also
equal at least 100% of the fair market value of the Common Stock on the date of
grant. Payment of the exercise price may be made in cash, promissory notes or
other consideration determined by the Board of Directors.
Exercisability. The board or its committee determines when options and
stock purchase rights become exercisable. Options granted under the Stock Plan
generally become exercisable at a rate ate of 1/5th of the shares of stock
subject to the option one year after grant and subsequently 1/60th of the shares
of stock subject to the option per month. Stock purchase rights may be fully
exercisable upon grant, or may at the board's discretion be subject to a right
of repurchase by the Company at the original issue price. The repurchase option
lapses at a rate determined by the board. The board or its committee determines
the terms of options and stock purchase rights. The term of an incentive stock
option may not exceed ten years.
Amendment and Termination. The Board of Directors may amend the Stock Plan
from time to time without approval of the stockholders. However, to the extent
necessary and desirable to comply with Rule 16b-3 under the Exchange Act (or any
other applicable law or regulation), the Company shall obtain approval of the
stockholders with respect to plan amendments in the manner required by such law
or regulation. No amendment may impair any options previously granted under the
Stock Plan without the
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consent of the optionee. The Stock Plan will terminate in March 2000, unless
earlier terminated by the Board of Directors.
Tax Information Regarding Stock Options. An optionee under the Stock Plan
will not recognize any taxable income upon the grant of the option. However,
upon exercise of an option, the optionee will recognize ordinary income for tax
purposes measured by the excess of the then fair market value of the shares over
the exercise price. Upon resale of the shares by the optionee, any difference
between the sales price and the fair market value at the time of exercise, to
the extent not recognized as ordinary income as described above, will be treated
as capital gain or loss. The Company will be allowed a deduction for federal
income tax purposes equal to the amount of ordinary income recognized by the
optionee.
PROPOSAL NO. 3:
APPROVAL OF AMENDMENTS TO 1993 EMPLOYEE STOCK PURCHASE PLAN
The Company's 1993 Employee Stock Purchase Plan (the "Purchase Plan")
provides employees of the Company with an opportunity to purchase Common Stock
of the Company through accumulated payroll deductions. The Board of Directors of
the Company amended the Purchase Plan on December 1997 to increase the number of
shares of Common Stock available for sale by 200,000 from 650,000 to 850,000.
The Board of Directors approved the amendment to the Purchase Plan to establish
a sufficient number of shares of Common Stock as a reserve under the Purchase
Plan for sale to the Company's employees. The affirmative vote of holders of a
majority of the shares of Common Stock represented at the meeting is necessary
to approve the amendment to the Purchase Plan. The Board of Directors recommends
that stockholders vote FOR approval of the amendment to the Purchase Plan. The
essential features of the Purchase Plan and certain information regarding the
Purchase Plan are set forth below.
Status of Shares. As of September 30, 1997, 597,887 shares had been issued
under the Purchase Plan, and assuming the approval of the amendment of the
Purchase Plan, 252,113 shares remained available for future issuance as of such
date.
Operation of the Purchase Plan. Under the Purchase Plan, the Company
withholds a percentage of each salary payment to participating employees over
certain offering periods. The Purchase Plan is currently implemented by
overlapping twenty-four month offering periods which commence April 1 and
October 1 of each year. Each such offering period is divided into four six month
purchase periods. The Board of Directors has the power to alter the duration of
the offering periods or purchase periods without stockholder approval, if such
change is announced at least 15 days prior to the scheduled beginning of the
first offering period or purchase period, as the case may be, to be effected. On
the last business day of each purchase period, the funds withheld are applied to
the purchase of shares of Common Stock unless such participating employee
withdraws from the offering period prior to such purchase date. To the extent
permitted by Rule 16b-3 of the Securities Exchange Act, if the fair market value
of the Common Stock on the last day of the purchase period is lower than the
fair market value of the Common Stock on the first day of the offering period,
then all participating employees in such offering period shall be automatically
withdrawn from such offering period immediately after the stock purchase on the
last day of the purchase period and automatically re-enrolled in the immediately
following offering period. Employees may end their participation in the offering
at any time during the offering period, and participation ends automatically on
termination of employment with the Company.
Eligibility; Administration. Employees are eligible to participate in the
Purchase Plan, as amended, if they have been employed by the Company for at
least six consecutive months. As of September 30, 1997, approximately 1,894
employees were eligible to participate in the Purchase Plan. Payroll deductions
may not exceed 10% of an employee's compensation, which under the Purchase Plan,
as amended, is defined as base straight time gross earnings plus overtime and
commissions. No employee may purchase more than $12,500 worth of stock in any
purchase period. The Purchase Plan is currently administered by the Board of
Directors.
Purchase Price; Market Value. The price at which stock is purchased under
the Purchase Plan is equal to 85% of the fair market value of the Common Stock
on the first day of the applicable offering period or the
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last day of each purchase period, whichever is lower. On September 30, 1997, the
closing price of the Company's Common Stock as reported on the NASDAQ National
Market System was $86.56.
Amendment and Termination. The Board of Directors may amend the Purchase
Plan from time to time or may terminate it or any purchase period or offering
period under it, without approval of the stockholders. However, to the extent
necessary and desirable to comply with Rule 16b-3 under the Securities Exchange
Act (or any other applicable law or regulation), the Company shall obtain
approval of the stockholders with respect to plan amendments to the extent and
in the manner required by such law or regulation. In the event of a merger or
sale of substantially all of the assets of the Company, the Board may shorten
the offering period or permit the assumption of outstanding rights to purchase
Common Stock. The Purchase Plan will terminate in March 2003 unless earlier
terminated by the Board.
Tax Consequences of Purchase Plan Transactions. The Purchase Plan, and the
right of participants to make purchases thereunder, is intended to qualify under
the provisions of Section 423 of the Code. Under these provisions, no income is
taxable to a participant until the shares purchased under the Plan are sold or
otherwise disposed of. Upon sale or other disposition of the shares, the
participant will generally be subject to tax, depending in part on how long the
shares are held by the participant. If the shares are sold or otherwise disposed
of more than two years from the first day of the offering period, the
participant will recognize ordinary income measured as the lesser of (a) the
excess of the fair market value of the shares at the time of such sale or
disposition over the purchase price, or (b) an amount equal to 15% of the fair
market value of the shares as of the first day of the offering period. Any
additional gain will be treated as long-term capital gain. If the shares are
sold or otherwise disposed of before the expiration of this holding period, the
participant will recognize ordinary income generally measured as the excess of
the fair market value of the shares on the date the shares were purchased by the
participant over the participant's purchase price. Any additional gain or loss
on the sale or disposition will be capital gain or loss. The Company is not
entitled to a deduction for amounts taxed as ordinary income or capital gain to
a participant except to the extent of ordinary income recognized by participants
upon a sale or disposition of shares prior to the expiration of the holding
period described above.
PROPOSAL NO. 4:
CONFIRMATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP, independent public
accountants, to audit the financial statements of the Company for the year
ending September 30, 1997. Arthur Andersen LLP has audited the financial
statements of the Company for each fiscal year since the fiscal year ending
September 30, 1992. The affirmative vote of holders of a majority of the shares
of Common Stock represented at the meeting is necessary to appoint Arthur
Andersen LLP as the Company's independent public accountants and the Board of
Directors recommends that the stockholders vote FOR confirmation of such
selection. In the event of a negative vote, the Board of Directors will
reconsider its selection. Representatives of Arthur Andersen LLP are expected to
be present at the Annual Meeting with the opportunity to make a statement if
they desire to do so, and are expected to be available to respond to appropriate
questions.
CERTAIN TRANSACTIONS
The Company's Certificate of Incorporation, as amended, provides that the
personal liability of its directors for monetary damages arising from a breach
of their fiduciary duties in certain circumstances shall be eliminated to the
fullest extent permitted by Delaware law. The Certificate of Incorporation, as
amended, also authorizes the Company to indemnify its directors and officers to
the fullest extent permitted by Delaware law. The Company has entered into
indemnification agreements with its officers and directors providing such
indemnification. The indemnification agreements may require the Company, among
other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature), to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified, and to obtain directors' and
officers' insurance.
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During fiscal 1997, Mario M. Rosati, a nominee for election to the Board of
Directors of the Company, was also a member of the law firm of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, Palo Alto, California ("WSGR"). The
Company retained WSGR as its legal counsel during the fiscal year. The Company
plans to retain WSGR as its legal counsel again during fiscal 1998. The amounts
paid by the Company to WSGR were less than 5% of WSGR's total gross revenues for
its last completed fiscal year.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the shares they
represent as the Board of Directors may recommend.
THE COMPANY WILL MAIL WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN
REQUEST A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS, SCHEDULES AND A LIST OF EXHIBITS. REQUESTS SHOULD BE SENT
TO INVESTOR RELATIONS, SANMINA CORPORATION, 355 EAST TRIMBLE ROAD, SAN JOSE,
CALIFORNIA 95131.
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PROXY SANMINA CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1998 ANNUAL MEETING OF STOCKHOLDERS -- JANUARY 30, 1998
The undersigned stockholder of SANMINA CORPORATION, a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated December 30, 1997, and 1997 Annual Report to
Stockholders and hereby appoints Jure Sola, Randy W. Furr, or either of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
1998 Annual Meeting of Stockholders of SANMINA CORPORATION to be held on January
30, 1998 at 11:00 a.m., local time, at the Sheraton San Jose Hotel located at
1801 Barber Lane, Milpitas, California 95035, and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth below.
1. ELECTION OF DIRECTORS:
FOR all nominees listed below (except as indicated.) [ ] WITHHOLD [ ]
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
John Bolger; Neil Bonke; Jure Sola; Bernard Vonderschmitt; Mario Rosati.
2. Proposal to approve the amendment to the Amended 1990 Incentive Stock
Plan to increase the number of shares reserved for issuance thereunder
from 3,650,000 shares to 4,550,000 shares:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Proposal to approve the amendment to the 1993 Employee Stock Purchase
Plan to increase the number of shares reserved for issuance thereunder
from 650,000 shares to 850,000 shares:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Proposal to ratify the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for its fiscal year
ending September 30, 1998:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
and, in their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment or adjournments thereof.
<PAGE> 16
This Proxy will be voted as directed or, if no contrary direction is indicated,
will be voted for the election of directors, for the amendment of the Amended
1990 Incentive Stock Plan to increase the number of shares reserved for issuance
thereunder, for the amendment of the 1993 Employee Stock Purchase Plan to
increase the number of shares reserved for issuance thereunder, for the
ratification of the appointment of Arthur Andersen LLP as independent public
accountants, and as said proxies deem advisable on such other matters as may
properly come before the meeting.
Dated:____________________________, 1997
_______________________________________
(Signature)
_______________________________________
(Signature)
(This Proxy should be marked, dated and
signed by the stockholder(s) exactly as
his, her or its name appears hereon, and
returned promptly in the enclosed
envelope. Persons signing in a fiduciary
capacity should so indicate. If shares
are held by joint tenants or as community
property, both should sign.)
